REP. TODD AKIN ®, MISSOURI: Different people from Washington, D.C. have come back to their districts and had town hall meetings and they almost got lynched.

(CHEERING)

(END VIDEO CLIP)

OLBERMANN: At blue dog Democrat Mike Ross' town hall in Arkansas.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I have never seen my America turned into what it has turned into, and I want my America back.

(CHEERING)

(END VIDEO CLIP)

OLBERMANN: It isn't taxes and it isn't tea parties and it isn't stimuli and it isn't Sotomayor and it isn't health care reform and it isn't the public option. Do some of these people simply fear and hate a black president?

By the way, the right-wing mob had obviously moved on without protests, without the sky falling, without almost any intention. Sonia Sotomayor is approved as the 111th Supreme Court justice in our nation's history.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is a wonderful day for Judge Sotomayor and her family, but I also think it's a wonderful day for America.

(END VIDEO CLIP)

OLBERMANN: But a continued nightmare for America from Blackwater. More accusations, under oaths from two former employees, founder Eric Prince hired mercenaries, veterans of the Chilean dictatorship of Pinochet, associates of ethic cleanser Milosevic of the Balkans and he provided Blackwater operatives with prostitutes in Iraq, some of them, quoting, "young girls."

Revenge of the physician: In the wake of the assassination of George Tiller, Dr. Warren Hern tells "Esquire," Tiller was killed by 35 years of, quote, "hate speech." Quote, "Bill O'Reilly is a disgrace to American society. He's full of-blank. This is not a debate, it's a civil war. And the other people are using bullets and bombs. I think O'Reilly is a fascist, and he would fit right in in Nazi Germany as far as I'm concerned," end quote.

All that and more-now on COUNTDOWN.

(END VIDEOTAPE)

OLBERMANN: Good evening from New York.

A health care reform smear campaign that has gradually revealed itself to no longer have anything to do with health care reform. Our fifth story on THE COUNTDOWN: What is being said by Republican lawmakers and by tea party protesters coordinated by the health care industry is now revealing that the fear being stoked seems to have far more to do with anger over who won the last presidential election than it does with who does and does not have health care insurance.

President Obama today is meeting with a bipartisan group of six senators from the finance committee about the health care bill that appears to be stuck in their limited negotiations. After the meeting, Democrat Max Baucus telling "Politico" that the lawmakers discussed the idea of a Democrats-only bill if the Republicans will not come aboard. And quoting him, "If Republicans aren't there, it could get to the point where sometime after the recess, Democrats may have to go in another direction. I hope not, but we have to face facts."

I know. After he said that, some of us were tempted to card him, to make sure he had I.D. and it was really Max Baucus.

Meanwhile, town hall meetings across the country now appearing to be more about the man Senator Baucus met with today, the president, than about the health care reform that the president is trying to enact.

In St. Louis County, Missouri, where Republican Todd Akin addressed constituents, the friendly crowd just loving it when the Republican congressman joked about the lynchings Democrats are receiving at their own events.

(BEGIN VIDEO CLIP)

AKIN: Different people from Washington, D.C. have come back to their districts and had town hall meetings and they almost got lynched.

(CHEERING AND APPLAUSE)

AKIN: I would assume you're not approving lynchings, because we don't want to do that. But the point is, people are really upset at some of this legislation, and with very good reason they were upset.

(END VIDEO CLIP)

OLBERMANN: Mr. Akin, never assume.

Largely upset because of the misinformation they have been steadily fed by the Republican spin and the astroturf groups formed by the health care industry. Oh, and unlike his Democratic colleagues, Congressman Akin did not take any questions from his audience.

An unruly crowd heckling Democrats Vic Snyder and Mike Ross, who are also leaders of the blue dogs, when those congressmen took questions yesterday at Arkansas children's hospital in Little Rock, one woman nearly reduced to tears. Not because she fears health care insurance will be taken away but because she fears her America has been taken away.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I have never seen my America turned into what it has turned into, and I want my America back.

UNIDENTIFIED FEMALE: And I don't think that representatives and senators are going to be able to do it. I'm scared.

UNIDENTIFIED MALE: We all are.

(END VIDEO CLIP)

OLBERMANN: Much to talk about tonight with our own Jonathan Alter, senior editor at "Newsweek" magazine.

Thanks for coming in, Jon.

JONATHAN ALTER, MSNBC POLITICAL ANALYST: Hi, Keith.

OLBERMANN: Is the fear-is that scare that's in evidence at that meeting and other town hall meetings, it is about the health care plan that's being negotiated by Congress or is it fear and anger about the man who won the presidential election November last? And is there an odd sense here that we could have been looking at these videos at something that came from a McCain/Palin rally?

ALTER: Yes. It does seem reminiscing of some of those rallies. They're right on the edge there of, you know, advocating violence, or other kinds of things. There is a kind of crack in the common sense of America right now. You're starting to see that.

But, I think, in some ways this is good for passage of the bill, because if we didn't hear about all this, and the anger and wackiness of some of these town meetings, we might actually confuse what's going on there with American public opinion. And we're now at a point in our political dialogue where we're beyond that. And so, I think, in some ways, the backlash has not set in against these town meetings and the kind of behavior we're seeing there and it won't have the affect of derailing the bill.

There might be some other things that are bigger problems like the big deficit numbers that are going to come out tomorrow, but I don't think these town meetings are going to send everything off track.

OLBERMANN: If Republicans, like Mr. Akin, are able to make jokes about lynching, whether-no matter what disclaimer they follow it with, might the White House actually be preparing to go this alone without Republicans? Is that what this meeting with six senators was about today?

ALTER: Well, that is something that President Obama does not want to have to do, but he may end up there. It may be like the stimulus, where they get, you know, a couple of Republicans in the Senate, maybe Olympia Snowe, one or two others. And in the House, they get none. That could very possibly happen.

The bigger problem the Democrats have right now is with the blue dog Democrats. They've got to hold them in line.

Essentially, what you have is the Republicans are the "party of no." The Democrats need to be the "party of yes." They can argue about the details, but the idea of sustaining the status quo is unacceptable. And Democrats all over the country have to just come out and say, we need a bill, argue about what's going to be in it but don't talk about they're being no bill.

OLBERMANN: When you hear some of the things in this, in these-that are actually, that actually do reference-supposedly reference health care, some of them are-no better word for it-so dense as to be amazing. You want to try to sort of back some of these things since nobody.

ALTER: Right.

OLBERMANN: Well, nobody ever hears the debunkings, at least we can give it a try.

UNIDENTIFIED FEMALE: It's like say 100 percent of Americans in America, 80 percent of them have insurance, might more. I'm saying, it's just the general presence. Why do 80 percent of us have to change and get something that y'all, the government, President Obama, is turning in with an agenda?

(CHEERING)

UNIDENTIFIED FEMALE: Why does he have to change our way of life for that 20 percent? Congress' job is mainly to protect us from terrorist, enemies, the borders.

(CHEERING)

(END VIDEO CLIP)

OLBERMANN: This is-there's two elements here. This is the old "I've got mine so screw you, I'm already in the rowboat you can swim" argument. But it's also the-"you're going to change my insurance" thing. How do you answer the sort of deep-seated emotion that's behind that, because, clearly, it's not based on facts?

ALTER: Well, first of all, she's right that 80 percent, you know, have health care. Where she's wrong is that somehow if they've got it, it's going to be enough for them, or they're not going to be in danger of losing it, should they lose their job. A lot of people nowadays are losing their jobs.

So, what she's not factoring in is what happens to people who have some sort of a change that happens in their lives? They get sick, they actually need health insurance, and it ends up being like homeowners, you know, insurance, where once you have a burglary, suddenly, they cancel your insurance.

OLBERMANN: Right.

ALTER: That's what health insurance is like and people have not had big health challenges, I haven't, and others don't understand that just because you're insured doesn't mean you're protected.

ALTER: The second thing that she's ignoring is the promise that President Obama's made which is that, if you're happy with your insurance, it's not going to get taken away. I mean, if she loves her insurance company, God bless her. But she's not going to have any problems with that insurance company, it's not of any danger of going bust. They might jack up their premiums on her again, but.

OLBERMANN: . or lower it because there's competition from the public option.

ALTER: Exactly. She, I think, is pretty confused because she looks like a Medicare recipient.

OLBERMANN: Sorry. I hate to break it to you, but-all right. Let me move on to this next one here because it actually hits on an actual problem.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I don't have health insurance right now, because I am limited to be able to buy simple catastrophic, because Congress will not open up the free competition of insurance companies across the state line. I trade in and out of health company stocks, United Healthcare and I'm making good money at it because you guys are churning (INAUDIBLE) to those grindstones.

(END VIDEO CLIP)

OLBERMANN: Besides the fact that he seems to be making money off the insurance industry here which seems to me to be the headline in his statement, he is correct because BlueCross BlueShield controls three quarters of the market in Arkansas and Obama said that a public option would keep the insurance companies honest. Without the public option, what's the answer to this guy's question?

ALTER: Well, there has to be some kind of cooperative, maybe what they call a souped-up cooperative, one that can actually withstand pressure from insurance companies which in the past have taken something like BlueCross, which is originally nonprofit and turned it into just another insurance company. So, the problem with the co-op idea is that it-they have been putty in the hands of the insurance company.

But there still is room for compromise there. They could design a new kind of co-op that could provide some real competition.

OLBERMANN: Yes.

ALTER: It could be essentially a public-private option that satisfies enough people to get something through.

So, I don't think liberals should go, you know, public option or bust. There are other alternatives and you have to remember that there are many, many important things in this bill that have become almost non-controversial that two years ago, if you'd been told they're going to-they're going to end discrimination against people with pre-existing conditions, they're going to insure another 30 million Americans, we say, "Great, where do we sign up?"

And now, some progressives are-maybe a little bit too wed to the public option. Even though, my favorite, too, but we shouldn't go down with the ship, with the public option.

(CROSSTALK)

OLBERMANN: But, of course, now, as we discussed that's relatively narrow debate co-op, public options-super co-op public options, or maybe the super co-op is the public option, there's still an undercurrent to all this which is addressed in this next question, which is about something that actually isn't in the bill, although thousands and millions of people think it is, this single-payer system.

REP. VIC SNYDER (D), ARKANSAS: Mike and I do not support a single-payer system. We're not interested in a single-payer system.

UNIDENTIFIED FEMALE: That's bull!

SNYDER: We're not interested in expanding Medicare to the rest of the public. We don't support a single-payer system.

UNIDENTIFIED FEMALE: But that's what Obama wants!

SNYDER: No, it's not what President Obama wants.

CROWD: Yes it is!

(END VIDEO CLIP)

OLBERMANN: The congressman then spends nine and a half hours trying to convince the crowd that the public option is not actually in the bill nor-or the public option is in the bill but the single-payer system is not in the bill. But FOX comes on and spends 24 hours a day saying it is in the bill or it's what Obama will then introduce.

ALTER: Right.

OLBERMANN: The right-wing misinformation machine has scored a victory on this to get this into people's heads. Have they not?

ALTER: Yes. I mean, they just shout all day, Rush Limbaugh and all of rest of them, that this is a Trojan horse for a single-payer plan. And it is, you know-it is possible that over time, this will morph into something that resembles single-payer. But it's not right now, and the insurance companies are in no danger of going out of business.

So, if we do end up with a single-payer plan, it won't be for many, many years. And people argue to the contrary are just lying about the particulars of this program. Obama, by design, did not move to single-payer because he realized that the country wasn't ready for it.

OLBERMANN: We have news that "cash for clunkers" has just passed, which we'll get to detail, the extension of that in a minute.

But I want to go to this last piece of tape, because this is the heart of the thing. The last question that went into this long diatribe asserting how the president would somehow get his legislation passed, you know, without Congress. He'd just go in and make it happen because, obviously, he's "dictator Obama," he's not the president. And she ended with this piece of tape.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I don't believe sincerely-I don't believe that the Constitution of the United States of America is going to be upheld in this issue.

(END VIDEO CLIP)

OLBERMANN: We've seem to have come full circle here. Paranoia and anger and "My America"-what happened to the debate about health care? How did these people get convinced that they're going to be what, burned at the stake? Is that what they are expecting to have happen here?

ALTER: Well, look, anytime you have wrenching social change, which this will bring-this is a big piece of legislation, you're going to have a lot of folks who are going to be anxious about it. So, in that sense, I'm sympathetic to this woman. But if you pay close attention, you recognize that all of this is very much alarmist, sort of median strip of American politics.

It's not out to the left and it's certainly not out to the right. It's not going to make a huge difference in most people's lives. All it's going to do is give people more choice, hopefully lower costs over time-even though it will cost more initially-and end the fear that all of us should have of what happens to us should we lose our jobs and get sick.

For us not to be addressing that, to just continue to discriminate against people who are ill is-that's the real outrage, and that, really, has to be ended this fall.

OLBERMANN: And you used the phrase that perhaps should have been used all along. We are discriminating against people who are ill. Sell it that way and maybe that would have gotten across more easily.

ALTER: It's a civil rights issue.

OLBERMANN: It is.

ALTER: It is also a security issue. People should not have to worry. This was the theme of FDR's presidency. You know, I'm kind of upset with that, but, you know, Social Security, then collective security, internationally.

This is health security. It's completing FDR's unfinished agenda. People shouldn't have to worry about this. It's bad enough to be sick without having to worry about how you're going to pay for it. That's what Barack Obama's own mother went through at the end of her life. It's just wrong that Americans should have to endure that in 2009.

OLBERMANN: Jonathan Alter of "Newsweek" and MSNBC-great thanks for putting some of the nails, and a little wise (ph) in nailing them to the wall that way. Thank you.

ALTER: Thanks, Keith.

OLBERMANN: And breaking news, as we mentioned, on the "cash for clunkers" program, breaking news, the Senate, in its final act before its August recess has passed the bill for $2 billion in additional funding, a vote 60 to 37. The House had overwhelmingly approved that emergency funding for the $1 million program moving the money from other stimulus funds. Many Republicans tried to defeat the House version with its numerous amendments but no avail.

Those rebates of up to $4,500 for new cars with the trade of certain gas guzzlers will continue. The bill now goes to the White House for the president's signature.

Putting aside the seriousness of health care reform and what might be racism tidied up and made to look like anything but, the fascinating part of the health care debate is it juxtaposed against what actually happened in Washington today, it makes Republicans look like drive-by opportunists who are moving from booth to booth at a county fair, stopping a fire a water pistol here and throw a few baseballs at a milk carton there, in hopes of scoring a kewpie doll.

Six ago, the confirmation to Sonia Sotomayor to the Supreme was, from the GOP pronounced point of view, the coming of the apocalypse and it had to be defeated by invoking a message just this side of George Wallace and the White Power Party. Today, she was confirmed to the Supreme Court and the world not only did not end, nine Republicans voted for her, and then they moved on to the ring toss booth.

(COMMERCIAL BREAK)

OLBERMANN: Judge Sonia Sotomayor is now Justice Sotomayor. And the GOP which might as well have equated her with mandatory euthanasia of Republicans was eerily quiet. Did they win by protesting then running away? Will Democrats learn anything from this emerging pattern?

Later in "Bests": The nation's last known provider of late-term abortions takes on Bill O'Reilly.

You're watching COUNTDOWN on MSNBC.

(COMMERCIAL BREAK)

OLBERMANN: The right branded her a racist. They said she wasn't that smart. They said she decided case based not on law but on personal ideology.

Our fourth on THE COUNTDOWN: After enduring months of attacks, the confirmation of Judge Sonia Sotomayor to the Supreme Court came and without with neither a Republican bang nor a Republican whimper. Did the Democrats just win something? Didn't they just stave off groundless attack? Shouldn't that give them what we use to call quaintly backbone?

SEN. AL FRANKEN (D), MINNESOTA: On this vote the yeas of 68 and the nays are 31. The nomination of Sonia Sotomayor of New York to be an associate justice of the Supreme Court of the United States is confirmed.

(END VIDEO CLIP)

OLBERMANN: Meantime, the president on the importance of that vote today.

(BEGIN VIDEO CLIP)

OBAMA: With this historic vote, the Senate has affirmed that Judge Sotomayor has the intellect, the temperament, the history, the integrity and the independence of mind to ably serve on our nation's highest court. I'm filled with pride in this achievement, and great confidence that Judge Sotomayor will make an outstanding Supreme Court justice. This is a wonderful day for Judge Sotomayor and her family, but I also think it's a wonderful day for America.

(END VIDEO CLIP)

OLBERMANN: The justice will be sworn in Saturday by the chief justice, John Roberts. She'll take her seat on the court next month, replacing David Souter who stepped down in June.

Time now to bring in from the nation's capital, "The New Yorker's" Washington correspondent, Ryan Lizza.

Ryan, good morning.

RYAN LIZZA, THE NEW YORKER: Good evening, Keith.

OLBERMANN: The GOP really did sort of go into hiding over this for the last few weeks, didn't they? I mean, have they all just moved over to the health care bazaar?

LIZZA: That's true. I think they've realize they've reached a point of diminishing returns publicly on opposing her, although, you know, I'm still shocked at how many opposed her. I men, there's a poll-you have to look at just how bad things are for the Republicans among Hispanics to realize the political implications of this.

There was a poll last week. It showed that the approval rating of the Republican Party is 85 percent disapproval and 4 percent approval. I mean, that-you just-it's very hard to get numbers like that.

OLBERMANN: But they've done a good job. But if-does this, the fact that there was no, you know, last-minute self-immolation-I mean, they did.

LIZZA: Yes.

OLBERMANN: . there were the nine votes. Does this take the gloss off what would ordinarily be a political triumph for a new president-your first Supreme Court nominee and they get two-thirds of the vote, one way or the other?

LIZZA: That's true. I mean, a little bit-you know, Washington is kind of like Wall Street in way. It's all about expectations and whether, you know, you beat expectations or not. And the fact that we all knew this was going to be a bit of a snooze, this vote today, means that it does take a little bit of-takes a little bit of the shine off of Obama's victory here. You know, even tonight, we're still mostly talking about health care and that debate.

So, yes, I think you're right about that.

OLBERMANN: The Republicans did not throw everything they had at her the way they did at the stimulus or they are doing at health care. But will the fact that they sort of flat-lined at the end be of some encouragement to Democrats, because I don't think anybody would disagree that Democrats do not seem very comfortable with having a large majority in the Senate?

LIZZA: Well, they had a weird strategy at the end. I mean, it seems like that the Republicans-I mean, they voted overwhelmingly against her, but at the same time, they stopped talking about it publicly. So, it seems like they realized that there was a certain audience that they wanted to know that they were voting against Sotomayor, mostly conservative Republicans, especially for those who are up for re-election next year and might have a tough primary fight. But with the broader public and certainly with the Hispanic voters, it seems like they wanted to be quiet about what they doing on Sotomayor.

OLBERMANN: Robert Menendez on this, that the Republicans who voted no, "To say you cannot vote for this qualified Latina sends a message to us as a community that we will not forget." Will the Democrats forget? Will the Hispanic population forget?

LIZZA: Well, the Democrats are not going to let Hispanic voters forget this for sure. You know, you have two big issues in the last five years where Republicans have been on the wrong side of-of a vote-of Hispanic voter interest. One is immigration reform, and now, this Sotomayor vote.

And you know, you have eight years of a Republican White House that was single-mindedly obsessed with winning Hispanics for the Republican Party and a year-you know, six months after that administration is gone, their approval rating is in the toilet. So, it's going to take a long time to repair that.

OLBERMANN: They're counting on the average life span of elderly white people to increase to 220.

Ryan Lizza of "The New Yorker," I think that's what it is. Many thanks. Sorry to cut you off there.

LIZZA: No problem. Thanks, Keith.

OLBERMANN: Hi, Western Union, I'd like to send a ram-gram, please. How they rescued the horned thing and how it got there. It's actually OK now.

And how they'll next try to rescue another horned thing. "Worst Persons" is ahead on COUNTDOWN.

(COMMERCIAL BREAK)

OLBERMANN: "Bests" in a moment, and the revenge of the persecuted.

First, on this date in 1938, Neil Alden Armstrong was born, and it is, thus, 40 years and 16 days since he became the first man to step onto the surface of any other object in space besides the Earth. He's recorded as having said that's "one small step for man, one giant leap for mankind," he meant to say, that's "one small step for a man." If you listen carefully, it sounds as if he said "that's one small stop for o man (ph)," and as Robert Klein noted, he should have just shouted "Coca-cola" and made himself $9 billion.

Let's play Oddball.

We begin in Hangesk (ph), Norway, where we find a ram hooked on a wire by one of its horns 20 feet above the ground, like an old pair of sneaks. These pictures are real. The ram was eventually rescued after being spotted by tourists. Look, honey, it's a ram on a telephone.

The line is actually a single wire fence that begins on the side of the hill and, for some reason, connects to a telephone pole. For the play-by-play on how exactly this happened, here is the ram's owner. You'll notice he speaks only Norwegian. But it doesn't need that much translation.

(FOREIGN LANGUAGE)

OLBERMANN: The international sound for-which also applies here. This is the BBC program "Look North." Anchor Colin Briggs (ph) reading the breakfast headlines in front of a live shot featuring the River Thames, going through central Newcastle. If you look closely, you'll see what appears to be a white flash passing over the river, and disappearing over the bridge.

Viewers contacted the network. The BBC has no explanation for the flash. Some say it was a bird. Others going with alien spacecraft. Others say it was a Norwegian ram. Still others believe the flash is actually the ghost of Benson, the celebrity British carp, who died earlier this week. Swim towards the light, Benny.

A horror show continues; Blackwater now accused of hiring mercenaries experienced in ethnic cleansing and providing them with prostitutes.

And Senator Cornyn is afraid the White House is trying to compile a list of e-mails addresses of critics. Isn't all that info still in the file, senator, from all of Mr. Bush's illegal wiretapping of the Internet traffic?

These stories ahead, but first time for COUNTDOWN's top three best persons in the world. Dateline Marmora (ph), New Jersey, number three, best cliche come to life, John Millison of Drexil Hill, Pennsylvania, charged with robbing the PNC bank in Marmora. He had been released from prison in November, having served nearly six years in the stir for robbing the PNC bank in Marmora. His cliche, of course, is the criminal always returns to the scene of the crime.

Dateline Salt Lake City, number two, best total absence of a sense of humor, KSL Radio and TV News. "Salt Lake Tribune" columnist Casey Jones wrote a farcical column calling for a cap and trade program on kids, a satirical suggestion that you can have two children, but a third would require you to buy accident insurance.

On its website, KSL put up a story that took the editorial seriously and refuted it, quoting an expert who said he felt sorry that the Tribune writer thought of his children as accidents, that there are so many benefits for having a husband, wife, children, and that the Tribune conclusions were hogwash.

Well, they were hogwash. They were a gag. Incidentally, I'm not sure that the KSL response isn't a gag, too, because the byline on their piece is by Mary Richards. Oh, Mr. Grant!

And Dateline Boulder, Colorado, number one, best revenge, Dr. Warren Hearn. He is the last physician openly providing late-term abortions in this country now that Dr. George Tiller has been assassinated. He is profiled in "Esquire Magazine," just out. He says Tiller-Tiller's death was the result of 35 years of, quote, hate speech against doctors who performed abortions, like the drum beat on Fox about Tiller the baby killer.

He says more than that. Quoting him, "Bill O'Reilly is a disgrace to American society. He's full of blank. This is not a debate. It's a civil war. And the other people are using bullets and bombs. I think," he went on, "O'Reilly is a fascist and would fit right in Nazi Germany, as far as I'm concerned."

There it is. Bill O'Reilly will never understand that the people who agreed with him on Tiller the baby killer do not stop at argument or political action. They use bullets and bombs and he, O'Reilly, has voluntarily associated himself with and encouraged them.

(COMMERCIAL BREAK)

OLBERMANN: For the past two days, we have relayed stories from two sworn declarations filed this week by former employees of Blackwater, which now calls itself XE, spelled XE. In our third story tonight, the big picture and more detail about an organization, the four-year executive known only as John Doe number two describes as criminal in its very DNA. Blackwater, XE's corporate structure designed by right wing evangelical founder Erik Prince, to perpetrate and conceal a vast range of crimes, everything from creating multiple companies, to basing some offshore, to changing names, all the way from A to Xe.

There is an accusation included here of child prostitution. But first murder. John Doe number one, former Marine, quote, "I personally observed multiple incidents of Blackwater personnel intentionally using unnecessary, excessive and unjustified deadly force. The driver was not heading directly towards us. Blackwater almost immediately began firing."

Outside Baghdad, "Blackwater fired without cause repeatedly at a car."

Outside Forward Operating Base War Horse, "Blackwater opened fire with the illegal weapon on a vehicle near the gate for no reason."

Another shooter, who had no reason for firing, was bragging and gloating about his kill.

From a former executive sworn declaration, quote, "Mr. Prince intentionally deployed to Iraq certain men who shared his vision of Christian supremacy. Knowing and wanting these men to take every available opportunity to murder Iraqis. Prince," quote, "knew the men being deployed were not suitable candidates for carrying lethal weaponry but did not care because deployments meant more money."

Supervisors sent men back to the states for reasons including saying they wanted to kill rag heads or rack up body counts, for excessive drinking, for steroid use, for failure to follow rules for lethal weaponry. Quote, "Mr. Prince and his executives would send them back to be deployed in Iraq with an express instruction to the supervisors to stop costing the company money."

One supervisor put the shooter who bragged about his kill on the do not use list. Xe took him off the list and put him back on the street. Prince allegedly not only overruling those who raised warning flags, but firing them as well. Prince, quote, "terminated those mental health professionals who were not willing to endorse deployments of unfit men."

OLBERMANN: Quoting John Doe number two, Prince knowingly hired two person who were previously involved in the Kosovo sex trafficking ring to serve at relatively high levels within his company. In all, XE, quote, unnecessarily killed scores of innocent Iraqis. Scores. And then covered it up, according to John Doe number one.

The Baquba shooting: "Blackwater failed to report the incident."

Outside Baghdad, "Blackwater misled the State Department into believing the murder was a justified use of force."

FOB War Horse, "Blackwater failed to report the incident."

And Blackwater taped all of it, he said, destroying every single tape afterward.

How far would Prince go? The former executive claims, quote, "it appears that Prince murdered or had murdered one or more persons who were planning to provide information to the federal authorities."

Both John Does anonymous for fear of their own lives. Number two reporting Xe management personally threatened me with death. Quote, "Mr. Prince created and operated this web of companies in order to obscure wrong-doing, fraud and other crimes. Shredded and destroyed many incriminating videotapes, documents, e-mails, transferred funds, quote, to avoid detection of his money laundering and tax evasions, smuggled weapons, quote, on Mr. Prince's private planes, and hid the revenue from his illegal weapons trade.

Roy Mettinger resigned as chief financial officer, stating he was not willing to go to jail for Erik Prince. His team included Bush veterans allegedly schooled in deception, Cofer Black, a top counter-terror official during torture and rendition, some of it carried out on Blackwater jets. Testified to Congress the FBI had certain 9/11 intel. This was not the case, the 9/11 report concluded.

Robert Richards, CIA deputy director for clandestine ops, who has denied journalist Ron Suskind's claim that he helped forge a bogus Iraqi document that linked Saddam Hussein to the 9/11 hijackers.

Joseph Schmitz, Bush's Pentagon inspector general, who redacted names of Bush officials from his report on a controversial Boeing procurement at the request of the Bush White House, blocking Congress from investigating it.

It was Schmitz, John Doe two tells us, who Prince asked to investigate a dispute among his execs at his headquarters. What was that about? Prince's North Carolina operations had an ongoing wife swapping and sex ring, which was participated in by many members of Mr. Prince's top executives.

Xe operatives in Iraq are the subject of even more lurid accusations. We told you last night about the illegal ammo that Mr. Prince allegedly smuggled to his men in Iraq, that pierced armor and then detonated from the heat of warm flesh, as well hand grenades, grenade launchers and small arm.

The lawsuit itself claims trial will show XE, quote, obtained and distributed steroids, and kept his enterprise running by, quote, having young girls provide oral sex to enterprise members in the Blackwater man camp in exchange for one American dollar. John Doe two's declaration, quote, Prince frequently visited the Blackwater man camp during his trip over seas. Mr. Prince failed to stop the on-going use of prostitutes, including child prostitutes, by his men.

The company, Xe, denies everything. In late 2007, Mr. Prince told Congress his company did nothing wrong.

(BEGIN VIDEO CLIP)

PRINCE: Ever life, whether American or Iraqi, is precious. I stress to the committee and to the American public, however, that I believe we acted appropriately at all times.

OLBERMANN: Just as he denied smuggling 900 weapons to which two Xe workers then pleaded guilty. Just as he denied wrong-doing in the 2007 massacre of 17 unarmed Iraqis in Baghdad, to which one of his shooters pleaded guilty, admitting the Iraqis were innocent, some of them running away or with hands up.

Still getting U.S. dollars for its last contract there; Blackwater is two years later still in Iraq today. Tomorrow, Mr. Prince's brand of devout Christianity and Blackwater's very literal modern day crusades.

The Cornyn corollary; when Bush illegally spied on Americans, that was good. When Obama offered to give honest answers to lie ridden e-mails, he was just trying to collect Americans' e-mail addresses.

Worst, the inventor of the infamous Laffer Curve explains that Medicare and Medicaid are not government programs.

And when Rachel joins you at the top of the hour, she'll talk to Tim Phillips, the head of Americans for Prosperity, one of the groups staging protests at town halls. Mr. Phillips also used to work with Ralph Reid and provided marketing for the 2000 Bush campaign.

(COMMERCIAL BREAK)

OLBERMANN: One of the supporters of the last president's illegal wiretapping, eavesdropping and monitoring on the Internet is up in paranoid arms at what he says was a secret conspiracy by this president to get the e-mails addresses of perhaps dozens of his critics. Seriously.

That's next. First time for COUNTDOWN's number two story, tonight's worst persons in the world.

The bronze to Lou Dobbs on the radio. Here we go again.

"I'm going to talk a little bit about MSNBC and how they've manufacture a story. When you hear the details, you're going to-I mean, these people at MSNBC have moved so far to the left, they would do almost anything seemingly to hold on to the good graces of the Obama White House, and their ideological thuggery allies. I mean, these guys are something. Would it be a thuggery, an assemblage of thugs? I don't know. Help me out with that. What would it be? What would be it a coven of thugs?"

And then he complained that I was attacking his family and they weren't in the public arena. So when someone gets arrested for trying to carry on to a flight in the airport in Newark, that's not in the public arena? All right, we'll just stick to Lou.

Did I ever tell you about the time Lou Dobbs moved from CNN New York back to Atlanta, and tried to stage a coup to become president of the network? He thought-Later, when we have more time.

Our runner up, Boss Limbaugh, who has now completed the cycle of racism and gone back to comparing the president to Nazis. "Adolph Hitler, like Barack Obama, also ruled by dictate."

Need I go on? Not really, no. But this is too much fun. "Hitler said he didn't even meat with his cabinet. He represented the will of the people. He was called the messiah. He said the people spoke through him. Do you know that the very first law that Hitler ordained was? Very first law was a law declaring how to cook lobsters. They were to be boiled. That was deemed to be the least painful. The law was sent all around to all the restaurants."

All this talk of boiled lobster got Rush excited and he turned the rest of show over to his backup. Loud crunching and slurping sounds were heard in the background of the studio.

But our winner, Arthur Laffer, who was one of Ronald Reagan's best named economic advisers, the pusher of the discredited notion that tax cuts for the rich stimulated the company, and the creator of the farcical Laffer curve. In an interview, he has now showed just how stupid he or other critics of health care reform believed this-how stupid they are about this topic.

Quote, "if you like the Post Office and the Department of Motor Vehicles, and you think they are run well, just wait until you see Medicare, Medicaid and health care done by the government."

Mr. Doctor expert, I hate to break this to you, but no matter how many private companies might be involved in Medicare and Medicaid, they're already done by the government. They're government programs. This also just in, Dr. Laffer, Limburg has landed safely in Paris!

Arthur, he's putting the laugh back in Laffer, today's worst person in the world.

(COMMERCIAL BREAK)

OLBERMANN: Facts do not cease to exist because they are ignored. In its latest attempt to ignore said fact, the GOP is now accusing the Obama White House of collecting personal data of its political opponents. Number one story, irony alert. One of the biggest cheerleaders of the Bush domestic spy program is suddenly worried about your privacy.

In an effort to debunk the lies circulating about health care reform, such as the Obama plan will kill your elderly aunt Mildred, the White House has developed an outreach program, posting an online call to action. There's a lot of disinformation about health care reform out there, spanning from control of personal finances to end of life care. If you get an e-mail or see something on the web about health insurance reform that seems fishy, send it to
flag@WhiteHouse.gov .

That statement was enough to trigger the latest round of GOP scare tactics. Today's purveyor of paranoia, Senator Jon Cornyn of Texas, accusing the president of compiling an enemy list, one e-mail address at a time. Likening the White House truth squadding proposal as another example of Obama spyware.

He wrote to the president, "you should not be surprised that these actions taken by the your White House staff raise the specter of a data collection program. I can only imagine the level of justifiable outrage had your predecessor asked Americans to forward e-mails critical of his policies to the White House."

Funny you should mention Mr. Obama's predecessor and the issue of privacy, senator. Funny because you seemed to be all for President Bush's warrantless wiretapping program, noting back in 2005, "none of your civil liberties matter much after you're dead."

Joining me now, Democratic strategist Chris Kofinis. Good evening.

CHRIS KOFINIS, DEMOCRATIC STRATEGIST: Good evening, Keith.

OLBERMANN: Let me start with that crucial point. Assuming Cornyn is right-and he's not-but aren't all these Internet addresses already accessible because George Bush mined them illegally? Or did Bush only spy on Democrats?

KOFINIS: I hope he didn't just spy on Democrats. It would raise a lot of questions about the bipartisan spirit of the Bush administration. I hope that's not the case. You've got to take what Senator Cornyn says with a grain of salt. After all, Senator Cornyn last month raised the specter of the threat from India to justify more funding for the F-22. I mean, in fairness, he should have justified the threat posed from Canada, given the health care debate.

So I think you've got to take everything he says and put it in a different perspective.

OLBERMANN: But this one is particularly juicy, because he defended data mining without people's knowledge during the Bush years. But he's now opposed to voluntary sending of White House e-mails, because they might contain e-mail addresses of people who sent out e-mails full of disinformation. Just-I mean, nobody tapped him on the shoulder and said, this looks really bad, senator?

KOFINIS: You know, put aside the fact that the White House made clear that no one's name or address is going to be collected; the point here to respond to the viral lies and misperceptions that we know are already out there, that are being fed by these various grass roots groups. That's putting it-calling them a nice fame. And so that, I think, is a very smart strategy from the White House.

We live in a 24/7 media environment. These viral lies can spread very fast. So it is important-I think it's critical, from the White House perspective, the Democrat's perspective, to respond to them, to know about them and to respond them hard and fast.

OLBERMANN: To that point, also, Republicans used fear of terrorism to make parts of the Constitution optional. You know that. We know that from years of vivid personal experience. Now they're using fear of government intrusion to try to stop the White House from correcting a record on health care reform. When do the Democrats take control of this particular part of message war, and when do they call the GOP out, not just on fear-mongering, but, in this case, on sheer stupidity?

KOFINIS: Well, you know, this is I think the real battle that we're going to be seeing play out in the next four-plus weeks, especially over this hiatus during the summer. There's a silver lining to the tea baggers, birthers, angry-fake angry mobbers. I think it's really impassioned the people out there, the overall majority of Americans that want health care reform.

I think what you're going to see, in terms of both the formal strategy that is coming out of the White House and the Congress, is an aggressive response. But I also think you're seeing a lot of Americans are starting to speak out and say, wait a second, this is not reflective of what we believe. We actually want health care reform. We want to actually deal with the crisis that has been ignored for decades.

OLBERMANN: But did Cornyn, just in passing him briefly, give away something he shouldn't have said? Talking about the town hall uprisings, and saying they were a good thing. He said fear, I would say, precedes anger. And I think there are a lot of people who tell me they are scared of what they see coming out of Washington. Should we be anticipating that for the next two years, four years? That you have nothing to fear but all fears we can make you think of?

KOFINIS: Yes. The reality is fear is the Republican party's favorite four-letter word. That's all they have. They have no ideas. They have no alternatives. Look at the health care debate. They've offered nothing substantive. This all about scaring people. It's unfortunate. But this is where we have to respond aggressively. And I think that's where you'll see from the White House, from the Democrats.

OLBERMANN: I'll just put an asterisk to your observation about four-letter words. That does not include Governor Sanford and Senator Ensign. Democratic strategist Chris Kofinis, thank you.

KOFINIS: Thanks, Keith.

OLBERMANN: That's COUNTDOWN for this 2,289th day since the previous president declared mission accomplished in Iraq. I'm Keith Olbermann, good night and good luck.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.